Microsoft Patent | "Microsoft: Motorola's Patent Abuse Will 'Kill Video on the Web'"

By: Gladys Rama
Category: Microsoft Patent

Microsoft filed a formal complaint against Motorola Mobility -- and, by extension, acquiring company Google -- with the European Commission on Wednesday, charging the handset maker of abusing its standard-essential patents.

This is the latest salvo in the patent feud between the two companies that began two years ago. In October 2010, Microsoft filed suit against Motorola alleging that Motorola's use of the open source, Google-backed Android OS in some of its devices violates Microsoft's patents. A month later, Microsoft filed another suit against Motorola, this time accusing it of charging "excessive" royalties for the use of wireless LAN and H.264 video codec technologies that Microsoft uses in its Xbox gaming console.

In response to the second suit, Motorola accused Microsoft of infringing 16 of Motorola's patents in multiple products. "Motorola Mobility has requested that Microsoft cease using Motorola's patented technology and provide compensation for Microsoft's past infringement," the company said at the time.
Now, Microsoft is accusing Motorola Mobility of charging exorbitant fees for those patents, particularly patents used in online video technologies.

"We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products," wrote Dave Heiner, Microsoft's deputy general counsel, in a blog post Wednesday. "Their offense? These products enable people to view videos on the Web and to connect wirelessly to the Internet using industry standards."

Heiner's blog post, titled "Google: Please Don't Kill Video on the Web," contends that because the patents in question fall under the category of "standard-essential patents," Motorola should license them under FRAND terms -- "fair, reasonable and nondiscriminatory." However, according to Microsoft, the legal actions Motorola has taken against it are designed to either force the offending Microsoft products off the market or strip those products of any technologies that use the disputed patents.

"Motorola is on a path to use standard essential patents to kill video on the Web, and Google as its new owner doesn't seem to be willing to change course," Heiner wrote.

He pointed to Motorola's proposed royalty fees for the video patents as an example of the company's violation of FRAND terms:
"For a $1,000 laptop, Motorola is demanding that Microsoft pay a royalty of $22.50 for its 50 patents on the video standard, called H.264. As it turns out, there are at least 2,300 other patents needed to implement this standard. They are available from a group of 29 companies that came together to offer their H.264 patents to the industry on FRAND terms. Microsoft's patent royalty to this group on that $1,000 laptop?
"Two cents."
Microsoft is no stranger to patent disputes; besides its Android patent suit against Motorola from 2010, it is also currently locked in a legal battle with bookseller Barnes & Noble over the use of Android in Nook e-readers. Microsoft has signed intellectual property deals with 70 percent of Android hardware makers, some of which entail Microsoft receiving royalties from the device makers' use of Android in their products.
However, Heiner maintains Microsoft's approach to patents is different from Google's. "Microsoft is not seeking to block Android manufacturers from shipping products on the basis of standard essential patents. Rather, Microsoft is focused on infringement of patents that it has not contributed to any industry standard," he wrote. "And Microsoft is making its patents -- standard essential and otherwise -- available to all Android manufacturers on fair and reasonable terms."

Microsoft's complaint comes just a few days after Apple also accused Motorola Mobility of violating FRAND practices and less than a month after the EC began an investigation into alleged FRAND violations by Samsung Electronics, particularly Samsung's suit against Apple over the alleged infringement of Samsung patents considered essential to 3G standards. When the EC investigation of Samsung began, Florian Müller, a legal consultant who currently has a contract with Microsoft, noted, "If Samsung's conduct warrants an investigation, so does MMI's [Motorola Mobility Holdings Inc.'s] in my view. I watch the litigation activity of both companies and differences are only gradual."

Microsoft and Apple have both expressed support for FRAND and said that they will not seek injunctions on products that use standard-essential patents. However, Google, which is in the process of acquiring Motorola Mobility, has been more ambivalent. While the Google-Motorola Mobility deal has been approved by the EC and the U.S. Department of Justice, the latter has called out Google for its stance on standard-essential patent licensing:
"During the course of the division's investigation, several of the principal competitors, including Google, Apple and Microsoft, made commitments concerning their SEP [standard-essential patent] licensing policies. The division's concerns about the potential anticompetitive use of SEPs was lessened by the clear commitments by Apple and Microsoft to license SEPs on fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs. Google's commitments were more ambiguous and do not provide the same direct confirmation of its SEP licensing policies."
According to Müller, "While Apple and Microsoft have a clear 'no injunction' policy on standard-essential patents, Motorola tells the courts that a standard-essential patent is a lethal weapon and therefore entitles [the patent owner] to huge royalties and other demands." It remains to be seen whether Google, upon acquiring Motorola Mobility, will continue that company's hard-line approach to patent-protection, or amend it to better fit FRAND standards.